GrainCorp forecasts big profit from huge winter crop harvest
A big east-coast winter harvest will have a big impact on GrainCorp’s business. See how the numbers are shaping up.
A HUGE east cost grain harvest looks set to boost GrainCorp’s coffers, with the company forecasting a net profit after tax for 2020-21 from $60 million to $85 million.
This contrasts with a $16-million loss in the previous financial year, after three seasons of drought.
GrainCorp managing director Robert Spurway told today’s annual general meeting grain receivals in the recent winter harvest to date had topped 13.8 million tonnes from Victoria, NSW and Queensland.
Mr Spurway said the receivals were nearly one million tonnes higher than that at the same point in time in the bumper crop of 2016-17 and well above the 4.2 million tonnes delivered to the company in 2019-20.
He said the company was expecting total receivals of 15.5-16.5 million tonnes and exports of 7.5-8.5 million tonnes.
The receivals forecast is made up of the winter just completed and the coming summer crop, plus grower direct to port deliveries.
GrainCorp’s previous receivals record was in 2016-17, when 15 million tonnes were received.
“We experienced near optimal conditions across much of eastern Australia during the recent winter cropping season and this has translated into one of the largest crops in recent history,” Mr Spurway said.
“Our focus now turns to the first major export program in years, with 1.7 million tonnes of grain shipped out since October, 2020, and our port bookings nearing capacity through to September 2021.”
While not disclosing which countries GrainCorp was exporting to, Mr Spurway said the big grain intake had seen the number of customer nations rise from about 30 last year to about 50 for the recent harvest.
“We are very confident in the demand we are seeing for grain,” he said.
“We are in the middle of a very strong export task.
“There are no material exposures or risk to any of the markets we are trading with currently.”
Mr Spurway said underlying earnings before interest, tax, depreciation and amortisation for the 2021 financial year were expected to fall between $230 million and $270 million.
This took into account $70 million paid out to its insurer, White Rock, under the crop production contract designed to stabilise its finances as a result of fluctuating seasons.
In 2019-20, GrainCorp received $47 million from the insurer due to drought impacting its winter harvest.
Chairman Peter Richards announced a fully franked dividend of seven cents a share.
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